Functional food business potential analysis in Malaysia, Thailand, Indonesia and The Philippines

Modern lifestyle and rapid growth of the fast food service industry has led to changes in eating habits of Malaysians and indirectly causing an increase of chronic diseases. Recognising this problem, various activities have been undertaken to raise awareness and change the lifestyle of the people to be more active so that such diseases can be prevented and controlled. At the same time, production of healthy and functional food begin to grow in demand in accordance to the increase in healthcare awareness among Malaysians as well as the rising costs of medical treatment. Hence, this study examines the comprehensive information about functional food and intends to show the business potential of the functional food industry. The analyses conducted on data collected are trend analysis, Compound Annual Growth Rate (CAGR) and the Boston Consulting Group (BCG) Matrix, also known as the Boston matrix. Results demonstrate that each country has a different functional product market. In Thailand and Indonesia, dairy based functional products have a high potential to generate high profit and require lesser need of further investments. Meanwhile in the Philippines, soft drinks, functional beverages and dairy functional products can generate sufficient cash return and able to operate using their own sources of funding. However, it requires a large amount of new investment to meet market demand. For Malaysia, functional beverage segment were identified as the main focus of functional food. It has a consistently high growth rate every year and a large market share. Therefore, it is highly potential to be developed further